2. BACKGROUND
2.1 Industry Analysis
To better understand the position of the Group in the food industry, the Porter’s 5 forces (5F) analysis best covers the information provided about the sectors (Porter, 2008).
The 5F represents a useful framework to follow in order to develop a useful picture of the main sector characteristics (Giarratana, 2016). The forces are as follows:
1) Actual Competition in the sector (The extent in terms of both the basis and intensity of competition that tends to drive down an industry’s profit potential)
2) Future Competition in the sector (The ease with which new entrants can overcome any existing barriers to start competing in the industry)
3) Power of Suppliers (The ability of suppliers to capture more of the value in the supply chain for themselves)
4) Power of Customers (The negotiating …show more content…
This is enabling Barilla to undertake riskier and more ambitious strategies, increasing brand awareness in developing countries (i.e. Pasta Pronto in China and previously U.S.A.) or consolidating the loyalty of traditional customers. The high degree of inventive and product enhancement, originated by the the high investment in R&D (€184 million in 2015) (Barilla, 2016a), activates the process of mix creation between cost and differentiation advantage in product lines, environmental impact improvement, and nutrition values development. Nowadays, due to ease of diffusion of information, a positive reputation level resulting from Barilla’s products’ donation to charity and excellence on environmental awareness is increasing the groups value. Intense industry entry barriers affect the powers of Barilla by limiting the degree of competitiveness and easing the position of large-scale multinationals (described in the industry analysis section).
2.1 Industry Analysis
To better understand the position of the Group in the food industry, the Porter’s 5 forces (5F) analysis best covers the information provided about the sectors (Porter, 2008).
The 5F represents a useful framework to follow in order to develop a useful picture of the main sector characteristics (Giarratana, 2016). The forces are as follows:
1) Actual Competition in the sector (The extent in terms of both the basis and intensity of competition that tends to drive down an industry’s profit potential)
2) Future Competition in the sector (The ease with which new entrants can overcome any existing barriers to start competing in the industry)
3) Power of Suppliers (The ability of suppliers to capture more of the value in the supply chain for themselves)
4) Power of Customers (The negotiating …show more content…
This is enabling Barilla to undertake riskier and more ambitious strategies, increasing brand awareness in developing countries (i.e. Pasta Pronto in China and previously U.S.A.) or consolidating the loyalty of traditional customers. The high degree of inventive and product enhancement, originated by the the high investment in R&D (€184 million in 2015) (Barilla, 2016a), activates the process of mix creation between cost and differentiation advantage in product lines, environmental impact improvement, and nutrition values development. Nowadays, due to ease of diffusion of information, a positive reputation level resulting from Barilla’s products’ donation to charity and excellence on environmental awareness is increasing the groups value. Intense industry entry barriers affect the powers of Barilla by limiting the degree of competitiveness and easing the position of large-scale multinationals (described in the industry analysis section).